After a career spanning 35 turbulent years in the auto industry, Robert Lutz, the one executive who, perhaps more than any other, personified the American auto industry’s comeback in the 1990s, gave up his job as Chrysler Corp. vice chairman July 1.
In a career that included jobs at General Motors Corp., BMW AG, Ford Motor Co. and Chrysler, where he was once presumed to be Lee Iacocca’s hand-picked successor, Lutz was considered the quintessential “car guy,” a product specialist who seemed to know what consumers wanted before they slipped behind the wheel.
The former Marine Corps fighter pilot has always been one of the industry’s most colorful characters but he also proved to be an astute leader as the catalyst for Chrysler’s rebound from near ruin in the early 1990s. When he turned 65 in early 1996, Chrysler’s board asked him to stay on beyond his normal retirement date.
And though he has now volunteered to relinquish his executive office, Lutz, 66, still has some ideas about what consumers will drive in the years to come. “The Volkswagen Beetle was a big hit and if Ford does a good job with the remake of the ’55 T-bird that could be a big hit,” Lutz said recently.
“It opens up the world for the nostalgia car. The car has to be modern in an arresting sort of way but incorporate some of the themes from the past,” he said. “They’re also going to be a little more trucklike.”
Nostalgia works, he added, because more contemporary designs tend to lack pizazz and people want to drive a car in which they can look good. Lutz, however, said in an interview as he was packing up his corner office in Chrysler’s 15-story headquarters that he also learned the love of product has to be balanced with good business acumen.
Citroen, the old French car company, always built wonderful cars but the emphasis on product left the company struggling financially, he said. So, his love of vehicles tempered with a business sense had produced record earnings at Chrysler in recent years.
“For the last 20 years, I have been very, very aware of the financial targets,” Lutz said. He is leaving Chrysler as it merges with Daimler-Benz AG, which, he thinks will be good for both companies.
“Neither company needs the other. That was what was appealing to us,” said Lutz, who also offered some details about the discussions between Chrysler and Daimler in 1995 to 1996 that led to the merger announcement in early May.
Originally, Chrysler and Daimler-Benz had discussed a joint venture “that would create a third company for the rest of the world,” he said. The idea was to collaborate in building vehicles for emerging markets in South America and Asia. But executives from both companies concluded the idea would not work and the discussions ended, Lutz said. At the end of 1997, however, Daimler Chairman Juergen Schrempp again approached Lutz with the merger proposal, and Lutz said he suggested Schrempp talk with Chrysler Chairman Robert Eaton.
After Eaton was named to succeed Iacocca in 1992, Lutz formed a close working relationship with the former GM executive. Lutz said he now believes his blunt, acerbic style cost him a chance to succeed Iacocca.
Lutz said his proudest achievement at Chrysler was the creation of the platform teams that focus talents from several disciplines, such as design, engineering, marketing and procurement, on individual products, rather than have the product ideas move assembly-line fashion through different functional organizations.
The idea for the platform teams came from Francois Castaing, Chrysler’s former chief of engineering who is now acting as a consultant to Chrysler but who headed racing at Renault before joining American Motors Corp., and Lutz’s experience as a marketing executive at BMW.
“If a race car has a flaw, you analyze it all week. On Friday and Saturday, you test the vehicle and on Sunday you race. The process works,” he noted.
“I also remembered the experience I had at BMW. When I got there in 1972, the motorcycles weren’t doing very well,” he recalled. So he asked BMW’s top executives to let him head a motorcycle task force that pulled the elements together. “I didn’t have any authority but I acted like I did,” he said, and the effort paid off in increased sales.
The same thing happened at Chrysler, despite some very serious opposition at the start from elements in the company. It yielded several new cars, including the LH series–the Dodge Intrepid and Chrysler 300–the Neon and Dodge Viper as well as the Jeep Grand Cherokee. They have given the company a personality.
“I think I made a contribution,” he said. Lutz also said he believed Chrysler has forged ahead of the Japanese rivals, who had ruled the automotive world in the 1980s. For now however, the Americans have the edge, he said.
Lutz, who bought a Czech-made training jet for fun and owns a farm near Ann Arbor on which he has built a private racetrack, said he has several projects planned for his retirement, including a tour to promote his new book, “Guts: The Unconventional Wisdom That Made Chrysler the World’s Hottest Car Company,” due out in the fall.
“I can honestly say I wrote every word of it,” said Lutz, who added he has been preparing mentally to leave Chrysler’s executive suite for some time. “I always remind myself this is a temporary privilege.”
BUSINESS ACCORDING TO BOB LUTZ
After his tours of duty the last 30 years with General Motors Corp., BMW AG, Ford Motor Co. and Chrysler Corp., Robert Lutz didn’t waste any time moving into a new career–as an author.
Lutz’s new book, “Guts: The Unconventional Business Wisdom that Made Chrysler the World’s Hottest Car Company,” (John Wiley & Sons Inc., $24.95) goes on sale in October and is probably one of the more entertaining business books published this fall.
“Guts” basically is broken into two parts, the first an autobiography that tries to define the well springs of a successful career, including growing up in a family of Swiss bankers with a taste for expensive automobiles.
As a youth, Lutz admits he was an indifferent student and enlisted in the Marine Corps in the early 1950s after graduating from high school at 22. He was on the verge of making a career of the Marines, when he went to the University of California-Berkeley to get the college degree he needed for a promotion.
He became so fascinated by business that he wound up resigning from the corps, getting an MBA and taking a marketing job with GM in Europe, he says. He left GM for BMW in 1971. He joined Ford in 1974. In 1985, after rising to executive vice president at Ford with responsibility for the company’s automotive operations, he moved into the executive suite at Chrysler, where he spent a dozen years building what had once been the industry’s 98-pound weakling into a powerhouse.
“Why did I come to Chrysler? One reason, quite honestly, was that I had risen about as high as I would go at Ford,” he writes.
The heart of Lutz’s book are chapters in which he describes seven laws of business:.
– The customer is not always right.
– The primary purpose of business is not to make money but to hire enthusiasts who can make great products that make money. Lutz also stresses the intuitive.
– When everyone else is doing it, don’t.
– Too much quality can ruin you, particularly if it’s a pointless quest for perfection that is invisible to the customer, he says.
– Financial controls are bad. The emphasis on control limits the ability to explore new opportunities, he explains.
– Disruptive people are an asset.
– Teamwork isn’t always good.
The last two are used to illustrate one of the points that Lutz made frequently at Chrysler– corporations need to create space for creative, right-brain types who make the products that make money.
